EMPCT WORKING PAPER SERIES The EMPCT Working Paper Series is a collection of recent research publications or working papers by the scholars affiliated with the Empirical Macroeconomics Policy Center of Texas. Monetary Policy According to Households: Perceptions, Reactions, and Channels EMPCT Working Paper Series No. 2026-0460 pages | PDF Download | PDF in BrowserGrigoli, Francesco, Damiano Sandri, Yuriy Gorodnichenko, and Olivier Coibion, “Monetary Policy According to Households: Perceptions, Reactions, and Channels”, April 2026. AbstractThis paper studies how households perceive the transmission of monetary policy and how these perceptions affect their decisions. Using a large-scale survey of over 25,000 U.S. households combined with randomized information treatments, we measure how households expect changes in the federal funds rate to affect economic conditions and their own behavior. Households report that higher interest rates lead them to reduce their spending, particularly on durable goods. However, the mechanisms underlying this response differ markedly from those in standard macroeconomic models. Respondents expect monetary tightening to raise borrowing costs and inflation. In turn, consumption function estimates identified using information treatments reveal that households respond to higher expected inflation by reducing consumption. Household inflation expectations also emerge as a central driver of portfolio reallocations following monetary policy changes. Reference No.TitleAuthor(s)Download 2026-04Monetary Policy According to Households: Perceptions, Reactions, and ChannelsFrancesco Grigoli, Damiano Sandri, Yuriy Gorodnichenko, and Olivier CoibionPDF, 1.5MB 2026-03Geopolitical PayoffsAndrei A. Levchenko, Nitya Pandalai-Nayar, and Henry YoungPDF, 0.9MB 2026-02Superstars or Supervillains? Large Firms in the South Korean Growth MiracleJaedo Choi, Andrei A. Levchenko, Dimitrije Ruzic, and Younghun ShimPDF, 1.1MB 2026-01A Behavioral Heterogeneous Agent New Keynesian ModelOliver Pfäuti and Fabian SeyrichPDF, 1.5MB 2025-10How Monetary Policy Is Made: Lessons from Historical FOMC DiscussionsCooper Howes, Marc Dordal i Carreras, Olivier Coibion, and Yuriy GorodnichenkoPDF, 3.5MB 2025-09The Economic Impact of Mass DeportationsJavier Cravino, Andrei A. Levchenko, Francesc Ortega and Nitya Pandalai-NayarPDF, 8.2MB 2025-08The Impact of Geopolitical Risk on Consumer Expectations and SpendingYuriy Gorodnichenko, Dimitris Georgarakos, Geoff Kenny, and Olivier CoibionPDF, 1 MB 2025-07The Dynamics of Technology Transfer: Multinational Investment in China and Rising Global CompetitionJaedo Choi, George Cui, Younghun Shim, Yongseok ShinPDF, 0.9 MB 2025-06The Inflation Attention Threshold and Inflation Surges (Revised)Oliver PfautiPDF, 2.1 MB 2025-05INFLATION, EXPECTATIONS AND MONETARY POLICY: WHAT HAVE WE LEARNED AND TO WHAT END?Olivier Coibion, Yuriy GorodnichenkoPDF, 1.3 MB 2025-04Firms’ Inflation and Wage Expectations During the Inflation SurgeErwan Gautier, Frédérique Savignac, Olivier CoibionPDF, 4.5 MB 2025-03Attention to the MacroeconomySebastian Link, Andreas Peichl, Oliver Pfauti, Christopher Roth, Johannes WohlfartPDF, 1MB 2025-02Fast and Slow Technological TransitionsRodrigo Adão, Martin Beraja, Nitya Pandalai-NayarPDF, 2.2MB 2025-01How Costly Are Business Cycle Volatility and Inflation? A Vox Populi ApproachGeorgarakos, Dimitris, Kwang Hwan Kim, Olivier Coibion, Myungkyu Shim, Myunghwan Andrew Lee, Yuriy Gorodnichenko, Geoff Kenny, Seowoo Han, and Michael WeberPDF, 1.3MB 2024-01Keeping Up with the Jansens: Causal Peer Effects on Household Spending, Beliefs and HappinessMaarten van Rooij, Olivier Coibion, Dimitris Georgarakos, Bernardo Candia, and Yuriy GorodnichenkoPDF, 2.1 MB 2024-02The Inflation Attention Threshold and Inflation SurgesOliver PfäutiPDF, 1.8 MB 2024-03Illiquid Lemon Markets and the MacroeconomyAimé Bierdel, Andres Drenik, Juan Herreño, Pablo OttonelloPDF, 10 MB 2024-04Relative-Price Changes as Aggregate Supply Shocks Revisited: Theory and EvidenceHassan Afrouzi, Saroj Bhattarai, and Edson WuPDF, 1.5 MB 2024-05Monetary Policy without Moving Interest Rates: The Fed Non-Yield ShockChristoph E. Boehm and T. Niklas KronerPDF, 1.4 MB 2024-06Concentration,Market Power, andMisallocation: The Role of Endogenous Customer Acquisition*Hassan Afrouzi, Andres Drenik, and Ryan KimPDF, 5.9 MB 2024-07Playing with blocs: Quantifying decouplingBarthélémy Bonadio, Zhen Huo, Elliot Kang, Andrei A. Levchenko, Nitya Pandalai-Nayar, Hiroshi Toma, Petia TopalovaPDF, 4.2MB 2024-08Weathering the Storm: Supply Chains and Climate RiskJuanma Castro-Vencenzi, Gaurav Khanna, Nicolas Morales, Nitya Pandalai-Nayar,PDF, 11.7 MB 2024-09Dynamic Models, New Gains from Trade?Christoph E. Boehm, Andrei A. Levchenko, Nitya Pandalai-Nayar, Hiroshi TomaPDF, 780.3 KB
